Identity.vc is bringing capital and community to Europe’s LGBTQ+ venture ecosystem

When Till Klein and Jochen Beutgen discovered Gaangels, a US-based syndicate of angel investors supporting LGBTQ+ founders, they wondered why there was no firm doing the same for the European LGBTQ+ startup community. Five years later, when no such firm still existed, Klein and Beutgen decided they should try starting a firm themselves.

In 2023, the pair launched Identity.vc, a venture firm that invests in early-stage companies with at least one founder or executive who identifies as a member of the LGBTQ+ community. The Berlin-based firm is currently raising €50 million for its debut fund and has raised €15 million to date. The founding partners also brought on Mari Laukkanen as a principal, who has prior operating and investing experience.

The firm writes checks ranging from €250,000 to €1.5 million to companies from the pre-seed to Series A stage. The firm is sector-agnostic and invests across Europe and beyond. Identity.vc has backed four companies so far, including eco.mio, a software plugin that helps companies manage the environmental impact of their business travel, and Paxton, an AI legal tech company.

“Most LGBTQ+ founders: they don’t come out to their investors because they think it might hurt them,” Klein told TechCrunch. “We think that’s a big mistake and [that means] You don’t have a trusting relationship with your investors. Investors who don’t like it, you don’t want them on your cap table. You have to be able to be yourself.”

Klein said he’s received a lot of positive feedback on this strategy, and so far fundraising hasn’t been too difficult. He said LPs are looking for funds that offer them this kind of diversification. He cited a recent Morgan Stanley survey that found 45% of U.S. investors were looking for a way to support LGBTQ+ founders.

It’s not surprising that investors see the value in backing diverse teams — numerous studies have shown that diverse teams outperform non-diverse teams — but it’s still refreshing to see that LPs and the European startup community have embraced the firm. Identity.vc’s story is a bright spot at a time when some firms focused on investing in diverse founders have struggled to raise funds in the U.S. and others have come under legal pressure for their thesis.

“So far there has been a lot of support from investors and other VCs. They love working with us and our experience,” Klein said. “When I talk to regular funds, they also know they need to be more diverse. They see us as an opportunity to increase their diversity. We haven’t faced that kind of reaction yet, probably because Europe is much more advanced in terms of diversity investing.”

Klein said the firm was inspired by Gangls, but consciously decided to do things a little differently. He said they wanted to raise a traditional fund rather than a syndicate to make follow-on investments easier.

The size of the fund was also deliberate. While some suggested the firm should start with a smaller fund, such as €20 million, Klein said they didn’t want to do that. They wanted a larger debut fund to show how serious they were about the opportunity. Klein said they also wanted to collect a higher management fee so they would have enough capital to start building a European community for LGBTQ+ founders and investors.

“In the U.S., there’s a real LGBTQ+ investor community — there isn’t in Europe,” Klein said. “We need resources and people who can do community work.”

The firm launched a Slack channel for the community, which currently has 300 members. The firm has also organized events in Madrid, Amsterdam and Paris where LGBTQ+ founders and investors can meet and connect with each other. He said these initiatives not only help his firm build community, but can also help with deal flow for Identity.vc and help startups find other sources of capital.

“We will bring the local community together, and you would be surprised how little connected LGBTQ+ founders and investors are,” Klein said. “We can create value by bringing local people together. If there is an early-stage startup that is too early for us and an angel investor, I can bring them together.”

The firm has only raised 30% of its target so far, but it’s starting to make a difference — and that gap will continue to grow as the firm brings in more capital.

“We think it’s needed for a number of reasons,” Klein said of Identity.vc’s existence. “We’re confident we can outperform because diversity-driven performance and support of the LGBTQ+ community gives us access to startups and interesting deals.”